Published in PC Hardware

Qualcomm mulls break-up and announces staff cuts

by on23 July 2015

We hate to say we told you so

Chipmaker Qualcomm is considering breaking itself up and firing 4000 people, which is exactly what our source said it would do last week.

Even the Wall Street Journal thought that 4000 was too high and when it reported staff cuts it said only 2000 would be going. Obviously Fudzilla's sources are more saucy than the WSJ.

Qualcomm admits that things are not going well it delivered its third profit warning this year and is facing rising competition from Taiwan's MediaTek.

The outfit plans to reduce costs by $1.4 billion, cut about 4,500 full-time staff, or 15 percent of its workforce.

Hedge fund Jana Partners wants Qualcomm to spin off its chip business from its profitable patent-licensing income. It does not believe that the chip making business is worth Qualcomm's time when there is real money to be made being a patent troll.

Qualcomm president Derek Aberle has admitted that the company had decided to take a fresh look at the corporate structure.

"The environment is constantly changing so the analysis done earlier may not be valid anymore, so it's in that context that we're taking a look at it again now," Aberle said.

The company said it expected to complete its strategic review by the end of the year and agreed to add three new board members in cooperation with the activist.

The company cut both its full-year revenue forecast and the outlook for its semiconductor business.
Revenue fell 14.3 percent to $5.83 billion in the third quarter — the first quarterly fall in five years — and missed the average analyst estimate of $5.85 billion.

Last modified on 23 July 2015
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